IBM’s Dismal Results

Over the past five years, the stock of International Business Machines Corp. (NYSE: IBM) is down 7%. Microsoft’s shares are up by 200%. IBM’s market cap is $115 billion, while Microsoft’s is $2.14 trillion. There is a reason for that, and IBM’s new earnings showed why. (These companies control over half their industry.)

IBM has become a second-tier tech company, and it has been for years. It was once the number one tech company in the world. Its new earnings showed it had revenue of $14.2 billion. This was barely up from the same period a year ago. Net income, at $927 million, did better. A year ago, the figure was $733 million.

In its most recently reported quarter, Microsoft’s revenue was $52.7 billion, up only slightly. It made $16.4 billion. Its cloud-computed business drove revenue, which is second only to Amazon’s market share. IBM often talks about its cloud business, which is small compared to these two companies. IBM Chief Executive Officer Arvind Krishna said its earnings were successful because of “our unique combination of an open hybrid cloud platform, enterprise-focused AI, and business expertise.” He cannot make a case that his business in these areas is anywhere near the industry leaders.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Krishna is not at fault. Ginni Rometty, who was CEO before him, destroyed IBM as its revenue fell quarter after quarter.

ALSO READ: The 25 Brands Customers Are Abandoning

In 1980, IBM was the eighth largest corporation in the country, according to the Fortune 500. It was bigger than General Electric. No other tech company was in the top 30 companies on the list. In the current list, IBM ranks 49th. It is miles behind Alphabet, Amazon, Apple and a small army of other tech companies. By any measure, IBM is big tech’s largest failure.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

Source: Read Full Article